Bowser has the stanchions..or at least did have them. I'm a little confused, You say you want to restore it, but you want to add detail parts. I would either restore it as sold or go all out & make a good looker & good runner.
  As far as drill bits, HSS bits will drill metal. Twist drills are only good for wood & plastic.  You may be able to use them on pot metal with a pin vise & lubrication if you take your time.  To make it a good runner you would probably have to install contact shoes or wipers made by Tomar,
  I have one that is ready to be remotored with a new gearbox from NWSL.
Bowser also has a valve gear kit that really adds a lot to this engine.
   Keep us informed about your progress...   Jerry

  The only danger is that he will catch "The model train viris"  It usually lasts forever with no known cure.   But, there are worse things.   Jerry

  I think Bowser still has the valve gear available along with a small super detailing kit. I got mine a few years ago.  I've got the plastic version.  It is on the "project " list.  Have everything i need including a NWSL motor. flywheel & gearbox.   Jerry

  Mike, I do have one of the HO Climaxes & it runs like a good watch.  I just limit the running time until I get the word that NWSL has the gears.
  People have to realize that making a "G" scale geared engine & an HO one cannot be compared. Large Scale gears also fail ( just replaced some in my Lehman Porter) The contact area on the gear faces on "G" scale models is hundred times that of HO models.  The same for the shrinkage problem. If a gear shrinks .002 in HO, it will probably split, probably wouldn't in "G" because of the larger diameter shaft & the larger amount of material around the shaft.
  Still think plastic is not the way to go because of the temp. changes in the layout room & the small size.    Jerry

  Alot of Varney rolling stock is still around under assumed names.  Bowser still offers Varney's Little Joe. The original was cast in white metal,but Bowser makes them from the same mould in plastic. ( it's actually the B&O Docksider).There are probably more models of this engine than any other in existence despite the fact that only 2 prototypes were ever produced.
                                                                      Jerry

Go with the Woodlands scenic.....Works well & won't bother anything.  Jerry

If Bachmann got the Shay right, why the need for replacement gears made by someone else.  I worked in a machine shop & it wouldn't pay to set machinery up for just a few parts. There was a significant demand for new gears. 
   I commend Bachmann for trying to produce affordable geared engines in HO scale. It just seems that because of the small size, plastic gears just won't hold up. Unless a new plastic formula is developed, the smaller gears should be metal.   Maybe Bachmann & NWSL could get together on this & put the metal gears in at production. I would pay $25 more for metal gears in the first place.   Jerry

Let's get the Shay & Climax right first before they open up another can of worms...but on the other hand, they are keeping NWSL in business...

All Turnouts are compatible with DCC. It's just that some are more compatible.
  I would use a separate power supply to throw the switches...like an old powerpack. The switch motors draw more amperage than an engine & may trip the circuit breaker & will slow down any engine on the track.
  I think you could eventually harm the system especially if it's a low amperage system like the Bachmann if you use it to throw switches.   Jerry

  I don't think you would have any trouble with warping, but you will have A LOT of trouble cutting window & door openings.  Use a small carbide cutter in a motor tool ( I use a B&D rather than Dremel...more amperage for less cost) & finish up with a small file to square the corners up.
  I realize you already have the Masonite, but styrene doesn't cost much for the small amount you need for an HO structure.  You could use the masonite for the roof & any other parts that don't require cutouts.    jerry

  Bachmann will not repair or replace it. production has stopped. they will send you something else.  I think Northwest shortline is working on metal replacement gears.  The ones they made for the shay are on sale now.
  See if Bachmann will help pay for the new gears when they come out. LOL
             Jerry

Pallets are made from green wood. They warp & crack as they dry. also made from scrap wood that can't be used for construction.  Most are not flat, or won't be when they dry out.  They are too thick & the larger the volume the more they will react to temp. & humidity changes.
 To sum it up, use the best quality wood you can afford to construct your layout...don't be sorry later.  I think the best material is 3/4" plywood ripped into 3' strips. Warping & shrinking will be kept to a minimum because of the fact that the grain runs in both directions.   jerry

  Yes, I think they went to yellow in 1953 in NJ.  So if you model steam or early transition, you should probably go with yellow.

   Never say Never... In your example, the price of the kit has already gone up 1000% ( I think).  My point is that altho we complain about the cost of our hobby, we are paying a lot more, but are getting much better quality for the same % of our income.  Even tho the FCM kits have gone up significantly the quality has gone up more than enough to justify it.
  Even if we hang around long enough to see a structure kit sell for $20,000 it will be worth it because it will have outstanding quality & it will be in line with our earnings.  Jerry

  The best thing i used is Woodland scenics snow. It comes in a shaker bottle & cost between $8 & $10.  It's much closer to scale & it doesn't seem to yellow.  It's probably ground foam.   If you have a large AC Moore nearby, they sometime have it & you can use your 40% off coupon.   Jerry